NAFTA Chapter 11: 'Canada' in The Legal Protection of Foreign Investment: A Comparative Study
J. Anthony VanDuzer, “Canada” in The Legal Protection of Foreign Investment: A Comparative Study, Wenhua Shan, ed., (Oxford and Portland: Hart Publishing, 2012) 173-240
Posted: 31 Jul 2013
Date Written: 2012
This book chapter provides a detailed discussion of Canada’s legal system focusing on its domestic law and international commitments related to inward foreign investment. Canada is highly integrated into the global economy through investment. Canada’s stock of foreign direct investment in 2009 was Can$549.4 billion, representing almost 43% as a proportion of Canadian GDP for that year. In 1996, the stock of outward foreign direct investment exceeded inward direct investment for the first time and by 2009 had reached Can$593.3 billion. Canada’s most important investment relationship by far is with the US. Fifty-three per cent of the stock of foreign direct investment in Canada is American. Forty-four per cent of Canadian investment abroad is in the US.
Canada is generally a welcoming jurisdiction for foreign investors. Provincial and municipal governments often compete to attract foreign investment. The only general law governing foreign direct investment activities in Canada is the Investment Canada Act. Under this Act, new foreign investment and the acquisition of control of a Canadian business are both subject to notification and, in limited cases, to review regarding whether the investment provides a net benefit to Canada. Specific laws limit foreign ownership in a few sectors, including those deemed to be critical to national cultural identity or security, such as the broadcasting, film, transportation, and telecommunications sectors. Canada has committed itself to a number of international treaties and agreements with a view, in part, to attracting investment. Canada is a member of the World Trade Organization (WTO) and subject to the obligations related to investment in the General Agreement on Trade in Services and the Agreement on Trade-Related Investment Measures. In addition, Canada has signed bilateral and regional trade agreements that provide protection for foreign investors in Canada, including the North American Free Trade Agreement and various bilateral agreements on investment.
Keywords: Canada, legal system, domestic law, foreign investment, international commitments, global economy, Canada, provincial governments, municipal governments, Investment Canada Act, Canadian business, laws limit foreign ownership, national, cultural, identity or security, international treaties
Suggested Citation: Suggested Citation